PV Integration Feasible at Low Cost

Brussels, Belgium -- Analysis and quantification of PV system integration costs in key European markets shows that the widespread penetration of PV power in Europe between 2020 and 2030 can be accommodated at a relatively modest cost.

Published under the rubric of the European PV Parity project, the authors of the report – from Imperial College, London – confirm the feasibility of installing up to 480 GW of PV by 2030, covering about 15 percent of the European electricity demand. The report claims to show that not only it is technically feasible, but also that the costs of implementing the necessary system integration measures are comparatively small.

The PV Parity project is a joint effort between partners such as WIP - Renewable Energies, of Germany, the European Photovoltaic Industry Association (EPIA) and utility groups including ENEL and EdF Energies Nouvelles. The project considers 11 EU countries – Austria, Belgium, Czech Republic, France, Germany, Greece, Italy, the Netherlands, Portugal, Spain and the United Kingdom – with the aim of PV competitiveness at the lowest possible price.

As well as looking at a number of different European nations, the analysis also considers the various cost components which make up the overall expenditure on integration of PV. These include the transmission and distribution costs, provision of back-up or spinning reserve and the requirement for balancing services.

One of the major findings is the wide variation in the cost of back-up capacity. In Northern Europe, where costs of around €14.5/MWh have been estimated, the lower ability of PV to displace conventional generation capacity impacts on the costs of back-up power, the authors argue. This compares with Southern Europe where these costs are lower and may even be negative when there is a strong correlation between PV output and peak demand.

According to the study, the second major cost component of PV integration is the distribution network cost. The analysis concludes that reinforcing distribution networks to accommodate PV would cost about €9/MWh by 2030. This cost usually reduces when peak consumption coincides with peak PV production, as it would be the case in Southern Europe, the report highlights.

Another important result of the analysis is that transmission cost linked to the integration of 480 GW PV by 2030 remains modest. In 2020 the cost is estimated at around €0.5/MWh, increasing to €2.8/MWh by 2030.